Japan Just CRASHED The US Market!

Summary

The video discusses the economic conflict between the Bank of Japan and the Federal Reserve, which has led to a global market upheaval. Japan's unexpected interest rate hike challenges the Fed's dominance, causing market chaos. The video delves into the economic strategies of these central banks, the risks of the Japanese yen carry trade, and the potential implications for global financial markets and individual investments. It also examines the 'impossible trilemma' of monetary policy, capital flow, and exchange rates, and speculates on the future paths of monetary policy in response to current economic pressures.

Takeaways

• 🌐 The Bank of Japan's unexpected interest rate hike challenged the Federal Reserve's dominance and caused global market turmoil.
• 📉 Japan's move was a response to the 'Lost Decades' of economic stagnation and stagflation, where traditional monetary policy failed to stimulate growth.
• 💹 The sudden change in Japan's monetary policy led to a sharp rise in the Japanese Yen's value against the US Dollar, impacting global currency markets.
• 🏦 The 'impossible trilema' faced by Japan and other nations involves the balance between free capital flow, a fixed exchange rate, and an independent monetary policy.
• 🔄 The carry trade, which profited from the low-interest rates in Japan, led to a massive short position against the Yen, creating systemic risk.
• 📈 The Federal Reserve's aggressive rate hikes in 2022 caused the Yen to plunge, prompting Japan to intervene in the currency markets to stabilize its currency.
• 🌪️ Japan's rate hike to shake off short sellers has had a domino effect, causing a potential deflationary crisis and market instability.
• 💔 The high debt-to-GDP ratio in Japan poses a significant challenge to normalizing interest rates without causing severe economic repercussions.
• 🌳 The dilemma faced by Japan and other nations is whether to risk a currency crisis or a deflationary crash, which could lead to a Great Depression-like scenario.
• 💰 The script suggests that governments are likely to choose inflation over deflation, potentially leading to a new wave of asset inflation beyond what was seen in 2020.
• 🚀 The presenter forecasts a 'Quantum wave leap' in technology and asset prices, advising viewers to understand market cycles to make informed investment decisions.

Q & A

What is the main conflict discussed in the video script between the Bank of Japan and the Federal Reserve?

The main conflict discussed is the unexpected move by the Bank of Japan to raise interest rates, challenging the Federal Reserve's dominance and causing global market chaos.

Why did Japan's decision to raise interest rates cause such a significant impact on the global markets?

Japan's decision was unexpected and went against the trend of keeping rates near zero, which caught the market off guard and led to a sharp increase in the Japanese Yen's value against the US Dollar.

What is the 'Lost Decades' referred to in the script, and how does it relate to Japan's economic situation?

The 'Lost Decades' refers to the period of economic stagnation in Japan, characterized by market crashes and lack of growth, where Japan struggled with stagflation and had interest rates at zero or negative for an extended period.

What is the 'impossible trilemma' mentioned in the script, and how does it affect a country's financial policy?

The 'impossible trilemma' is a situation where a country can only have two of the following: free flow of capital, a fixed exchange rate, and an independent monetary policy. It affects financial policy by forcing a country to choose between these options, impacting their economic strategy and global financial relations.

How does the Federal Reserve's aggressive rate hiking cycle affect the Japanese Yen?

The Federal Reserve's aggressive rate hikes made the US Dollar stronger, which in turn caused the Japanese Yen to plunge in value as investors moved towards the higher-yielding US assets.

What is the 'carry trade' mentioned in the script, and why is it significant in the context of Japan's financial situation?

The 'carry trade' is a strategy where investors borrow money in a country with low-interest rates (like Japan) and invest it in a country with higher returns. It is significant because it created a massive risk for the market when Japan raised its interest rates, causing a rapid unwinding of these trades and putting downward pressure on the Yen.

Why did Japan's verbal warning about taking action on currency if needed come after the Yen's value continued to plunge?

Japan's verbal warning was an attempt to deter short sellers who were betting against the Yen and to stabilize its currency. However, the continued plunge indicated that market participants were not convinced by the warning and continued to sell the Yen short.

What is the potential consequence if Japan were to normalize its interest rates with the Federal Reserve's rates?

Normalizing interest rates with the Federal Reserve could lead to Japan paying a significant portion of its GDP in interest on its debt, which could be unsustainable given its high debt-to-GDP ratio.

What are the two main choices Japan faces in response to the current financial challenges, as outlined in the script?

The two main choices are to either allow the Yen to continue to fall, leading to a currency crisis, or to attempt to save the currency by fighting off short sellers, which could lead to a deflationary crisis.

How does the script suggest governments typically respond to financial crises, and what does this imply for the future of asset prices?

The script suggests that governments typically choose to print more money to avoid a deflationary crash, which can lead to inflation and push asset prices to new highs, as seen in the aftermath of the 2020 economic shutdowns.

Outlines

00:00

🌐 Central Bank Showdown: Japan vs. Federal Reserve

The script begins by setting the stage for a financial battle between the Bank of Japan and the Federal Reserve, highlighting the potential for market chaos. Japan's unexpected decision to raise interest rates is portrayed as a bold challenge to the Federal Reserve's global dominance. The implications of this move for asset prices and the financial future of investors are underscored, with the narrator, Mark Moss, positioning himself as an experienced investor and educator who will guide viewers through the economic chess game unfolding on a global scale.

05:01

📉 Japan's Desperate Move and the Global Market Impact

This paragraph delves into Japan's economic desperation, characterized by decades of stagnation and the recent surprise decision to raise interest rates, which has sent shockwaves through global markets. The discussion introduces the concept of the 'impossible trilemma' faced by countries with central banks, illustrating the trade-offs between free capital flow, fixed exchange rates, and independent monetary policy. The narrative focuses on how Japan's actions have led to a significant appreciation of the Japanese Yen and a drop in the US Dollar Index, indicating a shift in global financial power dynamics.

10:02

💹 The Unraveling of the Japanese Yen Carry Trade

The script explains the mechanics of the Japanese Yen carry trade, which has been a significant driver of global financial markets. It describes how investors borrowed in Japan at near-zero interest rates to invest in higher-yielding assets, particularly in the US. The sudden rate hike by the Bank of Japan has disrupted this trade, causing a rapid unwinding that has put downward pressure on the Yen and global asset prices. The comparison to the collapse of the cryptocurrency exchange FTX is used to illustrate the precarious nature of this financial situation.

15:02

🏦 Japan's Debt Dilemma and the Global Economic Crisis

This section discusses Japan's massive public and private debt, and the potential consequences of normalizing interest rates with the Federal Reserve. It outlines the dire economic scenario that would result from Japan attempting to raise rates to levels that could match the Federal Reserve's, highlighting the unsustainable cost of servicing their debt. The script suggests that Japan is at a crossroads, facing the choice between a currency crisis and a deflationary crisis, with global implications for financial markets.

20:04

🌪️ The Great Dilemma: Inflation vs. Depression

The final paragraph contemplates the broader global economic implications, drawing parallels between Japan's situation and potential choices faced by other nations, including the US. It suggests that governments are likely to choose inflation over the alternative of a Great Depression, leading to further money printing and asset inflation. The narrator predicts a 'Quantum wave leap' in technology and asset prices, inviting viewers to join a live discussion to understand the investment strategies for navigating this predicted economic landscape.

Keywords

💡Bank of Japan

The Bank of Japan is the central bank of Japan, responsible for formulating and implementing monetary policy. In the video, it is portrayed as taking an unexpected and bold step by raising interest rates, challenging the Federal Reserve's dominance and causing global market chaos.

💡Federal Reserve

The Federal Reserve, often referred to as the Fed, is the central banking system of the United States. It is depicted in the video as a major player in the global financial power struggle, with its interest rate hikes having a significant impact on the value of the Japanese Yen and global markets.

💡Interest Rates

Interest rates are the cost of borrowing money and are a key tool used by central banks to control inflation and stabilize currency values. The video discusses how Japan's decision to raise its interest rates has caused a shock in the financial markets, contrasting with the Fed's aggressive rate hikes.

💡Global Markets

Global markets refer to the worldwide arena where financial assets are traded. The script describes how the actions of central banks, particularly the Bank of Japan and the Federal Reserve, have sent shock waves through these markets, affecting asset prices and investor behavior.

💡Carry Trade

A carry trade is an investment strategy where an investor borrows money at a low interest rate in one currency and invests it in another currency that offers a higher interest rate. The video explains how the carry trade involving the Japanese Yen became a significant risk when Japan's interest rate policy changed, causing market instability.

💡Monetary Policy

Monetary policy refers to the actions of a central bank that influence the economy by adjusting the money supply and interest rates. The video discusses the monetary policies of Japan and the United States and how their shifts have led to financial market turmoil.

💡Debt to GDP Ratio

Debt to GDP ratio is a measure of a country's total debt in comparison to its Gross Domestic Product (GDP). The script highlights Japan's high debt to GDP ratio and how it affects the country's ability to normalize its interest rates without causing severe economic repercussions.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The video suggests that the current financial policies could lead to high inflation, affecting asset prices and the cost of living.

💡Asset Prices

Asset prices refer to the cost at which goods, services, or financial instruments can be bought or sold in the market. The script mentions how changes in monetary policies and interest rates can rapidly change asset prices, impacting investment strategies and returns.

💡Quantitative Easing

Quantitative easing is a monetary policy in which a central bank creates new money to buy government bonds or other securities to inject money into the economy and stimulate spending. The video implies that the continuation of such policies could lead to a significant increase in asset prices, as seen in the aftermath of the 2020 economic shutdowns.

💡Investing Strategies

Investing strategies are plans or methods devised to help investors achieve their financial goals. The video discusses the impact of global financial shifts on investment strategies, suggesting that understanding these changes is crucial for capitalizing on opportunities and managing risks.

Highlights

Japan's unexpected interest rate hike challenges the Federal Reserve's dominance and causes global market chaos.

The battle between central banks can rapidly change asset prices in today's financialized world.

Japan's strategic move is about redefining global financial power, not just saving their currency.

The video explores the economic chess game being played on a global scale.

Mark Moss, with decades of experience, provides insights on navigating turbulent markets.

Japan's desperate move to raise interest rates was a surprise to the world.

Japan has been in a state of stagflation, known as the 'Lost Decades,' with no market growth.

The impossible trilemma of free capital flow, fixed exchange rate, and independent monetary policy.

Japan's situation exemplifies the struggle between global monetary order and national policy independence.

The Federal Reserve's aggressive rate hikes have a significant impact on global currency values.

Japan's Yen has been plunging against the US Dollar, causing panic in the markets.

The concept of the carry trade and its role in the current financial crisis.

Japan's $2 trillion carry trade and the risks it poses to the global market.

The potential consequences of Japan normalizing its interest rates with the Federal Reserve.

The dilemma of choosing between a currency crisis and a deflationary crisis.

The potential for a 'Quantum Wave' in technology and asset prices due to inflationary policies.

Mark Moss offers a live analysis of market charts and investment strategies for the upcoming economic changes.

Transcripts

the bank of Japan versus the Federal

Reserve and how their battle crashed the

market and of course what this means for

you now in today's over financialized

world the battle between major central

banks can change the asset prices in the

blink of an eye and today the stakes

have never been higher Japan and the

Federal Reserve are locked in a battle

that sent shock waves through the entire

Global markets and the aftermath could

change everything now what happened well

just a few days ago Japan took an

unexpected and a very bold St step that

uh nobody thought that they could or

that they would do this and basically

they raised interest rates Against All

Odds now this was a direct challenge to

the federal reserve's dominance and has

thrown markets into complete chaos but

why did they do it and how does this

impact you now in this video we're going

to dive deep into the economic chess

game that's being played on a global

scale we're going to look at how Japan's

strategic move against the FED isn't

just about saving their currency it's

about redefining Global Financial power

we're going to look at the hidden

strategies that Traders around the world

were using and how they're all now

unraveling and of course what all this

means for your Investments and your

financial future now having this

information is going to make sure that

you're ready to capitalize on the risk

and the opportunities at play and you

know if you want to protect and grow

your wealth which who doesn't so let's

go real quick if you're new to the

channel my name is Mark moss and I've

been investing my own money in these

turbulent markets for decades now you

know the same smooth Seas never made a

skilled sailor well I've swim in the

most turbulent Waters now today on top

of making you know these investing

educational videos and coaching

thousands of investors on navigating

these markets I'm also a partner in a

global hedge fund and this morning we

are really busy understanding all of

this and of course making the

corresponding moves so you're going to

get the research fresh right now so you

can go make the same moves that you need

to make as well all right let's get into

this all right so are talking about

Japan's desperation Japan's unexpected

move now we talked about sort of This

Global Supremacy over monetary order and

really when we think about this we have

to understand that there are just well

there's central banks and then there's

major central banks so there's I don't

know 160 170 central banks but there's

uh four major central banks and they are

of course the Federal Reserve the United

States the top of the Heap right uh the

reserve currency of the world then below

that we have uh the bank of Japan which

we're talking about here we have the

east B the European Central Bank and we

have the pboc we have China right so

those are the major central banks now

the dollar is the reserve currency of

the world and so the FED sort of drives

the market but not every country likes

that so there's this battle for

Supremacy we're going to talk about that

and they did a desperate move now when I

say desperate they did something that

nobody thought was possible basically

Japan has been the last couple decades

of what we call stagflation the Lost

decades as they call it in Japan where

basically the markets crashed everything

crashed and they haven't been able to

get any growth they've had no inflation

in the market now so Japan had rates

basically at zero as a matter of fact

they had rates negative for a really

long period of time just recently we're

going to go through this but just

recently they were to to get them back

up to zero and a little bit above zero

nobody thought they could actually rais

them and they did they caught everybody

off guard and that's what's causing the

whole world to panic right now and what

we can see here we can see it in this

chart right here you can see how big of

a panic how big of an Abrupt move this

is so the the Japanese Yin priced in US

dollar had been going down down down

down down down down for a long period of

time and out of nowhere look at this it

just took off it's up 15% when you're

looking at currencies that is a massive

move I know if you're used to looking at

Bitcoin 14% is nothing that is a big

deal for the Japanese Yen and we can

really see how big of a move this was

made specifically by Japan obviously not

just from this chart right here but if

we look at the Dixie chart so the Dixie

the dollar Index is basically meur

measuring the dollar against a basket of

currencies so when we look at the dollar

overall of course the dollar goes up and

down everything's trading against each

other and we can see that the dollar the

the dollar Index the Dixie has dropped

but it's down 2% now that's a pretty big

candle two two big candles in a row

right here uh but you can see it's sort

of within this range so it all came from

Japan like I said In This Very desperate

attempt that they have all right now

understanding The Impossible situation

that Japan is in means that you have to

understand the impossible trilemma now a

trilemma is different than a dilemma a

dilemma means that you have you know to

choose between one or the other trilemma

means you have to choose two over one

and so the impossible dilemma that not

just Bank of Japan has but every country

with a central bank and policy has is

these three things number one free flow

of capital so now a country wants to

have capital accounts Capital markets

they want to attract capital investment

Capital businesses to be there people to

invest in the country but then people

also need to get money out of the

country this is one of the problems with

China China's like a black hole where

money can come in assets come in but it

can never leave which is why people

don't want to invest there so you need

to have a free flow of capital in and

out but you also want to have a fixed

exchange rate and then third you need

you want a country would want to have an

independent monetary policy meaning they

can adjust their monetary policy they

can tighten the ease whenever they want

the problem is that if you get two of

these you're going to get less of

another so for example if you want to

fix your exchange rate like what China

does and you want to have independent

monetary policy like China then you

can't have an open Capital account if

you want to have an open Capital account

and monetary policy then you can't have

a fixed exchange rate the market will

dictate what that is and so that's sort

of the situation that uh Japan has found

themsel in now why is that well uh well

first I want to say is that they want to

have an independent policy that's one of

the legs of the trilemma but independent

from who would be a question that that

I'd want to ask well independent from of

course the reserve currency of the world

so we can see in this chart right here

the reserve currency the US dollar makes

up

62% of foreign reserves so of course

it's going to dictate what the world

does and so Japan has been stuck in this

situation where they've been again sort

of at the whims of the United States uh

the the dollar and they want to change

this that's the tri limit that they've

been in but how can they try to get all

three get that proverbial free lunch and

that brings us to the next part and that

is that the FED has been fighting back

now the FED isn't really so much

fighting back against Japan or or China

maybe they are a little bit but really

the FED just wants to control its own

independent monetary policy so the FED

can set the interest rates although

that's a whole another topic if you want

me to make a video on that let me know

but really the FED is sort of adjusting

to what the market wants the rates to be

that's a whole different topic uh but

the FED does or is independent and of

course the United States has open

capital accounts but the problem is that

again because the FED has the dollar

which is 62% of the world's Reserve

currency it's dictating the rest of the

market so what happened is if you

remember the FED started hiking rates

remember that uh we were on this

monetary easing cycle for so long rates

had been basically at zero since like

2008 they went up a little bit came back

down and was it uh November October of

2021 the FED announced they were going

to start raising rates uh then about

March March of 2022 they went on the

fastest most aggressive rate hiking

cycle in history now what does that mean

for us well if we look at this chart

right here we can look at Japan we can

see in this chart right here this is the

Japanese Yen again priced in US Dollars

and what I'm showing you in this box

right here is that the price the

stability between the Yen and the dollar

had been pretty stable this is about I

think about 2015 right here to 2022 yeah

2015 to 2022 and it had remained very

stable in this box but right here where

I put this red arrow is drum roll please

it's March of 2022 it's when the FED

started going on that aggressive rate

hiking cycle and so as they started

raising rates in the US it started

making the dollar much stronger and it

plunged the Japanese Euro all the way

down and it plunged the Japanese Yen all

the way down now this blip right here is

where we're at today that's what we're

talking about but what's important to

understand is that this had been a very

stable monetary policy for Japan during

this whole period and during this period

about a seven-year period people got

lulled to sleep they thought that Japan

would never changeed Japan would just

stay in this Zone but of course as the

Yen started to

plunge then it opened up another trade a

trade that we're going to talk about

right now I'm going to break it down and

then you can see this pop right here but

what happened happened during that time

the yin was plunging it was getting

weaker and weaker and weaker now I like

to use uh if you remember when FTX The

cryptocurrency Exchange collapsed I did

several videos on that and I used uh the

fall of FTX sort of as a proxy to

understand what's going on in Japan so

let me revive that story here real quick

so you can understand this so you

remember FTX was a cryptocurrency

exchange and if you remember what

happened during that time I made a video

about it where they had their own token

and the problem is that they used use

that token for collateral for a lot more

debt and to buy other things but the

problem is is that their token started

to drop in value and so what FTX was

doing is selling all their other assets

and buying their token in the market to

try to prop up that token eventually CZ

the head of binance said hey that

token's not worth it we're going to sell

that token we don't want it anymore and

then it started plunging rapidly FTX was

selling everything they could to try to

buy it at Market to keep it from falling

but they couldn't nobody wanted the

token and this is exactly what's going

on with Japan the Japan token stayed

relatively stable but once the FED

started to raise rates the Japanese

token started plunging now Japan has

been aggressively selling anything they

can to buy their token the Japanese yen

to prop it up and that's where we're at

now we can see this happening in real

time the Yen weakness persists despite

Tokyo's $2 billion intervention so the

the Japanese government is

selling us treasuries selling whatever

they can and buying billions tens of

billions of dollars of their own

currency at Market trying to prop it up

but the problem is just like with the

fall of FTX nobody really wants it and

so we can see it plunging plunging

plunging as a matter of fact right here

so it went up and came down this is the

first intervention shortly after ueda

the press conference that saw Japanese

rip to 160 so they did an intervention

it went up temporarily it worked for a

minute and then it plunged down again

and then they did another intervention

they got it back up again but it plunged

again so no matter how much they

intervene it has like a sugar rush it it

gets up really quickly and then it just

falls back down sort of like where FTX

found themselves but here's the problem

they realize this is the problem and

they realize that they're going to have

to do something drastic in order to get

this to be fixed so the yin is under

pressure even as Japan steps up its

verbal warning so then Japan's like well

we're dumping tens of billions of

dollars we can get it temporarily the

problem is is all these short sellers

these short sellers are piling in and

pushing the price down so what we're

going to do Japan said they're ready now

a verbal warning they're ready to take

action on currency if needed so this is

after this was in June 23rd it's about a

month ago month a little over a month

ago they're ready to take action on

currency if needed what does that mean

well any action that they have to take

they've been trying to buy backup and

they have about $1.2 trillion of assets

they could sell to continue to prop up

their currency but they could also just

try to shake out all the people that

were shorting the market now what do we

mean by shorting the market this is what

you probably been hearing about which is

called the carry trade and so the carry

trade was opened up because Japan was

stuck in this trilemma situation and so

basically the shorts had opened up a

carry trade of about $2

trillion again against the Japanese Yen

they were selling it short I'm going to

break down how this works for you and

what we can see is that that created a

massive risk for the market as a matter

of fact it says is the Japanese carry

trade the next big risk in the market

this was in January people have been

talking about this we've been doing

videos on this for a long time this has

been a big risk Japan's government is

engaged in a massive $ trillion Carriage

rate I mean imagine how massive that is

for a small country like Pan um it says

here that this could bring unexpected

risks if the Central Bank tightens

policy H which is exactly what just

happened so the Japanese couldn't buy

enough of their token to prop it up all

these short sellers were selling it

short putting that downward pressure

like when CZ from binance said he was

going to sell the FTX token and Japan's

trying to prop it up and they're like

well we may have to do something

unexpected unexpected like what well

this in January says right here it could

bring unexpected risk if the Central

Bank tightens policies and that's

exactly what happened we can see right

here that the Central Bank of of Japan

started to do that so this is going back

to 2008 right here the red line is CPI

the yellow line is the Japanese Central

bank's interest rate policy and you can

see that it was basically flatlined from

2008 it went down into negative

territory right here around 2016 and

it's remained in negative territory just

here in 2024 it got above positive

territory and now they raised it just

0.25% now to put this into perspective

the Federal Reserve of the United States

raise rates Five Points this is only a

quarter of one point and look how much

damage this has done all right so that's

exactly what happened they raised rates

and got unexpected results let me show

you how this carry trade works and why

this matters so here's how the car carry

trade works it's basically Arbitrage

what this means is that in the US market

us treasuries let's say that we can earn

5% okay over here in

Japan as I just showed you rates were

zero so let's say that in Japan I could

borrow for let's say

0.8% so I go borrow money in Japan for

0.8% I bring it over to the United

States and I park it in treasuries and I

make the difference 5% minus

0.8 or I put it into the US Stock Market

and let's say I put in the S&P 500 I put

in the mag SS I put in Nvidia and now

I'm making 12 15 20% minus the eight and

so more and more money kept getting

borrowed selling the Yen short and it

all that money was Finding its way into

stronger markets mostly into the United

States in the stock market into Nvidia

into us treasuries it's been great but

here's the problem a lot of this money

was put in there on margin so that means

that they would borrow $1,000 from here

and they would take it over here and

they would buy let's say $5,000 worth of

stuff or maybe maybe more depends on

what their credit is maybe $10,000 worth

of stuff but the problem is is this

unwinds very quickly for two reasons as

long as this Japanese rate kept getting

lower lower lower lower lower lower

everything was great right this debt

kept getting cheaper cheaper cheaper

more money kept coming over and these

assets went higher higher higher the

problem is the unexpected results when

Japan raised the rates and only by

raising them only

0.25% this whole thing started to unwind

when these rates went up all of a sudden

the interest that was owed went up and

when that happened some of this had to

start selling off to now pay for this

and as this started to sell off the

asset prices started to go down as the

asset prices to go down started to go

down on stuff that was on margin then

the margins were called and they had to

post more collateral to post more

collateral they had to sell more when

they sold more prices went down even

more which then mean more margin costs

means they had to sell more to post more

collateral and all the while they were

selling this creating this downward

pressure this was getting more and more

expensive and this whole thing started

to wind down now this was great for so

long because for 20 years they kept

rates at zero and they just continue to

stay low and get lower lower lower but

again the UN expected shift to try to

shake off these short sellers put the

entire Market into a tail spin so that's

where we're at now confronting Godzilla

where do we go from here all right the

elephant in the room if you will we'll

call it Godzilla because it's Japan so

where do we go from here what happens

can Japan really continue to raise their

rates what happens to the US markets

what happens to the four central banks

that are now fighting against each other

well what Japan is doing is somewhat

necess AR but it comes with a very steep

cost so they have all these short

sellers that have piled in pushing the

currency down and doing this carry trade

over into the United States they need to

shake them off they need to get rates

back into positive territory but the

problem is it comes at a steep cost it

comes at the cost of wrecking the global

markets the bigger problem is that Japan

is one of the most indebted nations in

the world with a

263 debt to Genie P now put that in

comparison the US is about somewhere in

the 120% range they're at 263 and not

just the government the private debt is

120% of debt to GDP so the problem is is

that they want to sort of normalize

their policy with the Federal

Reserve but the problem is is that the

FED is at you know 5% and they're at

0.25 they may have to hike another 13 14

depends on how fast they hike but 1 more

times to even get anywhere normalized

with the fed and if it the whole world

is melting down over a quarter point

hike what do you think happens if they

go with a three four five% hike now the

bigger problem is this right now

currently if they were to normalize the

policy with the FED that means they

would be paying

133% of their gross domestic product of

their GDP just for interest on the debt

now to put this into perspective the

United States as you've seen I've done

many videos on this uh the interest on

the debt has gone up parabolic and as a

matter of fact in the United States

we're now spending a trillion dollars

more than a trillion dollars just on the

interest on the debt and the interest on

the debt has now exceeded the cost that

the US spends on the US military which

of course the US military spends more

than the next 10 Nations combined but

even as crazy as that number is it's

about 3% of GDP so for Japan to try to

do what's necessary and try to normalize

policy they'd be spending

133% problem is they can't do that and

so they want to confront Godzilla but

Godzilla might just be too big for them

so which path are they going to take are

they going to fight Godzilla or they

just going to go back into their hole

and really we can see that the entire

system is buckling as they weigh these

two decisions so the choices are one do

we have a currency crisis do we continue

to let the Yen just fall plunge plunge

plunge plunge plunge or do we try to

save the currency fight off the short

Sellers and have a deflationary crisis

those are are choices those are the

sides of the coin heads or tails they

can choose what they

want not unlike what FTX had to choose

and not unlike which the us is going to

have to choose at some point the us is

going to have to choose right now would

we rather have another Great Depression

a deflationary crash where jobs are

wiped out people are homeless and on

food lines that the stock market's wiped

out the real estate Market's wiped out

we go into another you know 20year Great

Depression period or do we have a great

debasement where let's just go print

trillions more dollars and let's just

put asset assets

Skyhigh this is the same decision the US

is in which is the same decision that

Japan is in do the markets crash or do

taxes crash you see if the markets crash

if we choose option one a Great

Depression then then what happens well

nobody's working and so with nobody

working then there's no taxes being paid

if the stock market crashes if the real

estate market crashes then there's no

capital gains taxes and then there's no

taxes to the government now the

government's already running

multi-trillion dollar deficits today if

we go into just even a garden variety

recession we'd expect to see tax

receipts plunge somewhere between 12 to

15% now the treasury just announced a

couple weeks ago that just the borrowing

for the rest of this year which is not

even half left they need another 1.7

trillion just for this year so if taxes

Garden variety recession crashed by 15%

they have to borrow even more if we have

a Great Depression style how will the

government survive now what's going to

happen obviously would be that they

would have to continue printing money

for the government and more stimulus

more welfare and more importantly to

continue to run that those deficits all

of that money printing will be highly

inflationary

so you know I think about uh 2020

remember 2020 and what happened in 2020

well the whole country was shut down not

because the recession but because the

government forced to shut down the

government then was forced to inject

money print stimulus money and injected

directly in the economy trillions of

dollars and what happened homes went up

by 50% stocks went up by 50% Bitcoin

went to the moon so did your gasoline

and so did your steak and so did your

houses as well and so I think about 2020

and I think this is where we're going

now in my opinion well it's not my

opinion based off a factual observation

if we look at every government in the

world today and sort of every uh

experiment in the past every government

in the past there hasn't been an

experiment that I've seen where a nation

decided Well boys pack it in it was a

good run while we had it let's just shut

her down not when there's still ink in

the money printer and so I believe that

they'll turn that money printer back on

and we'll print it skyh High they'll

always choose a currency crisis and a a

great basement over the alternative and

that is inflation now the thing about

when this inflation shoots Sky High is

it doesn't push all asset prices up

evenly for example the NASDAQ went up by

about uh double what the S&P 500 did

Bitcoin went up about 5

600% on top of that right and so there's

different ways that these different

assets interact now if you'd like to see

the playbook for this we're in the

middle of what I'm calling a qwave a

Quantum wave leap in technology and this

inflation that we're about to see thrust

into the market is going to make 2020

look like chump change and it's going to

drive asset prices to highs we've never

imagined come hang out with me live I

got about 20 or 30 sh charts that I want

to show you so you can understand how

each one of these Cycles is very

predictable and it lays out exactly what

assets we should invest to I call it the

investing black hole because there's

really no other place you put your money

I'm going to give you the top five

assets I'm checking out it's free

there's a link down below if you want to

come hang out and uh hang out with me

I'll answer all your questions live to

to make sure you have it but either way

this is what's going on in Japan it's uh

just like FTX was an example of Japan

Japan is an example of the rest of the

world we're really witnessing this in

real time and the entire world one by

one the great milkshake theory is going

to see each Nation forced to choose one

of these three things and as I said

every example in current and past

history shows which path they take all

right let me know what you think in the

comments down below thumbs up if you

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right to your success I'm out